New Castle Wire Nail Co.'s Case , 18 Pa. Super. 257 ( 1901 )

Opinion by

Rice, P. J.,

The decree of dissolution was entered on February 20,1899. At tins time Joseph Arthurs had an action of trespass for personal injuries pending and at issue against the corporation. On November 5, 1900, Arthurs presented his petition and thereupon was granted a rule “ on parties interested ” to show cause why the decree of dissolution should not be opened, set aside and reversed, and he- be permitted to file exceptions and objections -to such decree being made. The rule was served on former officers and stockholders of the corporation for whom counsel appeared de bene esse and filed an answer. The petitioner filed the ex parte affidavit of his attorney in reply to this answer, and after hearing, no depositions being taken on either side, the court discharged the rule. Mr. Arthurs appealed from this order, his only assignment of error being, “ The court erred in refusing to open and strike off decree of dissolution.”

The manner of dissolving a corporation is prescribed by the Act of April 9, 1856, P. L. 293. It is undisputed that courts of common pleas have jurisdiction to dissolve such corporations as this (see Weimer on Corporations, sec. 423 and cases cited); that the petition for dissolution was presented to the court of common pleas of the proper county, was in due form of law and contained all the averments necessary to give the court jurisdiction; that the presentation of the petition was lawfully authorized by the stockholders at a meeting duly convened ; that public notice by advertisements of the time and place when it would be presented was duly given, as prescribed by the act; that all taxes due from the corporation to the commonwealth had been paid into the state treasury, and that a certified copy of the decree was duly filed in the office of the secretary of the commonwealth. In short, it is not alleged that there is any defect or irregularity apparent on the face of the proceedings. The appellant’s claim to have the decree opened or set aside is based solely on the ground that the decree was obtained by fraud, because in the account filed at the time the petition was presented and acted upon it was stated, “The New Castle Wire Nail Company has no debts.” The allegation that this was a fraudulent misrepresentation is based solely on the fact that the petitioners’ action of trespass was pending. But a disputed claim for damages sounding in tort is not a debt before it is prosecuted to judgment; and even if it be granted that the term “ debts ” was used in an enlarged sense to denote any kind of just demand, we are compelled to say that there is not the slightest evidence that the representation was untrue, much less that it was fraudulently made. The appellant contented himself with showing that Ms action was pending without attempting to show a prima facie liability of the defendant in the action. Again, when the rule was applied for the corporation had been defunct for more than a year and eight months, its corporate existence was extinguished, it had surrendered its franchises to the state which granted them, and the surrender had been accepted in the mode prescribed by the state. The attempt is to revive a corporation previously actually dissolved. Has the court power to do this after the time for appeal has gone by? Certainly the act of 1856 does not give it. But if the court in the exercise of its equitable powers to open decrees and judgments could restore the corporation to life after such a lapse of time, could it do so upon the petition of a private citizen, without the intervention of or even notice to the representative of the commonwealth? These questions, it seems to the writer, are not free from difficulty. Granting, however, that both should receive affirmative answers, this is clear, that it is the duty of the petitioner to act with the greatest promptness after he has actual knowledge of the decree, and the burden of proving that he did so rests on his shoulders. The petitioner in the present ease alleged that the application for dissolution was “ without express notice ” to him, and that he “had no knowledge whatsoever of the said application.” In view of the lapse of time between.the date of the decree and the presentation of his petition this was not enough; he ought to have gone further and shown when he obtained knowledge of the decree, in order that the court might determine whether he had acted with reasonable diligence. Moreover, it is admitted that his attorney had express notice of the decree at least a year before this rule was applied for. Upon the whole case, taking into consideration the appellant’s omission to give prima facie evidence of a liability on the part of the corporation, and his failure to show affirmatively that he moved with due diligence, we cannot say that in discharging the rule the legal discretion of the court was improperly exercised. It is unnecessary to discuss other questions.

Order affirmed and appeal dismissed at the costs of the appellants.